Mo’ Money, Mo’ Brexit Problems; DOJ V. Health Insurance Industry: The First Round; No News is Not Good News at Yahoo

It’s all Brexit to me…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

The bad Brexit news just keeps on coming with the IMF now sharing its unpleasant thoughts. The fund has cut the global forecast for the next two years, expecting global economic growth for 2016 to come in at 3.1% and 3.4% for 2017. And those figures are on the bright side since the IMF feels that there is “sizable increase in uncertainty” about how bad the Brexit damage will be. That forecast is riding the wave that the EU and British officials will graciously reach new trade agreements that won’t make trading conditions any more challenging than necessary. If officials can’t hash out the details then Britain just might be staring down the wrong end of a recession. All because of the Brexit vote. Perhaps the pro-Brexiters really didn’t expect investors would ditch Britain in favor of more fiscally welcoming euro areas. And who can blame the ditchers, seeing as how the pound has dropped an ugly 12% against the dollar since the ominous vote. The IMF, however, still anticipates actual growth for the UK, if only by a paltry 1.7%. By the way, this is the IMF’s fifth time cutting its forecast in just 15 months. In fact, had the Brexit vote gone the other way, the IMF was set to upgrade global projections. Way to go Britain! As for the impact in the U.S., the IMF thinks it will go relatively unscathed. How reassuring.

Put up your dukes…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Looks like there won’t be any big health insurance company mergers. At least not if the Department of Justice has its way. Which it usually does. Anthem’s proposed $48 billion merger with Cigna and Aetna’s proposed $34 billion merger with Humana are on hold, and maybe permanently, as the Justice Department gets set to file antitrust lawsuits to block their ambitious plans. The Justice Department, which has been scrutinizing these deals for a year, is worried that these mergers would reduce competition and harm the little people a.k.a. the consumers with much higher prices. But the health insurance companies argue that they’ve endured some challenges with President Barack Obama’s Affordable Care Act and would like to prove the Justice Department wrong by shedding assets to competitors which would help them achieve cost savings and better results. Anthem and Aetna argued that their proposed mergers would provide them with the right scale to create more savings. And who doesn’t like savings? But the Justice Department isn’t biting. A merger between Anthem and Cigna would give the  newly combined company 54 million members with $117 billion in yearly revenue. The health insurance industry would shrink to three humongous players from five massive ones. United Health Group would sit smack dab in the middle of them. Expect a fight. A very long and costly one. Investors apparently are as shares went down today at all four health insurance companies.

How much is that website in the window?

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

What’s to talk about at Yahoo is that there is not much to talk about at Yahoo. Still no word on who will buy the site’s core internet assets, though today is the last day that bids will be accepted. Offers are expected to be between $3.5 billion and $5 billion. Rumors are swirling that Verizon will be the lucky/likely buyer. Not that that has been confirmed. What has been confirmed is that Yahoo managed to eke out earnings of nine cents per share. Too bad expectations were for ten cents.  To add insult to fiscal injury, last year at this time Yahoo took in 16 cents per share. Want to hear about Yahoo’s net loss? Of course you do. The company ate $448 million in net losses. Just to put that into perspective, last year at this time Yahoo only lost $22 million. Yahoo also found itself writing down the value of Tumblr. Again. The first time it did that this year it was for $230 million. Now it was for $382 million. Yahoo bought the internet site just three years ago for the whopping sum $1.1 billion. Oh well. It’s like paying full price for something that went to clearance shortly after. Yahoo also slashed its work-force, going from 11,00 employees to 8,800 employees. And just so you know, Yahoo CEO Marissa Mayer said that the cost-cutting measures are working. It’s just not clear for whom.

 

Anthem Hits a Sour Note With Major Cyber Attack; Under Armour’s Over the Moon Ratings; Sony Executive Amy Pascal Down But Not Out

Cyber-sickening…

Image courtesy of chanpipat/FreeDigitalPhotos.net

Image courtesy of chanpipat/FreeDigitalPhotos.net

Anthem now joins the illustrious list of major companies to get cyber-hacked, although the health insurance company has yet to definitively say how many of its 80 million current and former customers are affected. It can definitively be said that all sorts of personal information was taken, including social security numbers, names, birthdays, employment data etc. – the kinds of details that can facilitate a very rude and inconvenient identity theft. Anthem says no credit card information was taken. Just everything else of significance. Customers can expect to be notified if they haven’t already been, and in keeping with corporate-cyber-attack tradition, affected customers will also get free credit monitoring and identity protection.  Anthem, which just happens to be the second largest health insurance company, with Anthem Blue Cross, Anthem Blue Shield, Amerigroup and Healthlink under its wings, just might earn itself the uncoveted distinction of having suffered the largest data breach in the health care industry. Ever. However, it’s still looking to sign up new customers for that pesky February 15 Obamacare deadline. Naturally the Feds are involved and if it’s suspected that information was stolen, the FBI has graciously established the Internet Crime Complaint Center website: www.ic3.gov. Anthem also wanted everyone to know that the data of its associates was also breached if that’s at all reassuring, though I don’t know why it would be. Now go and change your passwords!

Bringing it on…

Image courtesy of iosphere/FreeDigitalPhotos.net

Image courtesy of iosphere/FreeDigitalPhotos.net

Don’t you just love a good athletic apparel smackdown? Today’s  smackdown is brought to you by Under Armour and its CEO Kevin Plank, who not so graciously told Nike and Adidas to get used to being number two during a CNBC interview. Charming, right? But after posting some boffo earnings that boasted 31% revenue growth to $895 million, I guess he earned the right to say that. Except that Under Armour is, in fact, currently the number two fitness apparel maker, behind Nike. Just saying. In any case, CEO Kevin Plank’s numbers were no accident. The company’s profits were up 37% to $88 million coming out to $0.40 per share. That, my virtual pals, was one cent more than what analysts predicted. Plank’s fiscal logic for Under Armour is pure fitness genius: The more people exercise, the more exercise apparel they’ll need. To add to its fitness arsenal, Under Armour picked up not one, but two calorie-counting, fitness-tracking apps: MyFitnessPal for the very robust price of $475 million and Denmark-based Endomondo, for a cool $85 million. MyFitnessPal currently has 80 million users with Endomondo coming in at 20 million users, mostly in Europe, and with those two acquisitions under its svelte belt, Under Armour hopes to become “the world’s largest digital health and fitness community.” How nifty.

Hack Attack Comeback…

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Sony Pictures Entertainment studio head Amy Pascal may be stepping down from her cushy spot at the top, but she’s not out of the picture. The executive, whose emails figured prominently in the Sony hack attack in December, if only because she made some racist comments about President Obama and called Angelina Jolie a spoiled brat (though she did say sorry), will now get a four year production deal with Sony.  While it’s safe to assume she won’t be working with Jolie, or Adam Sandler, or the President for that matter, she will get distribution rights to the the films she does. Not bad for someone who put her foot in her mouth, via email, subsequently earning herself some of the biggest A-list enemies imaginable. The movie “The Interview,” starring the cuddly duo of Seth Rogen and James Franco, was allegedly the source for all the hacking misery, as it poked fun at North Korean dictator Kim Jong Un. The scandal cost Sony $15 million which coincidentally is the same amount of money the “The Interview” made from 2 million digital downloads – in its first few days of its release.